Increased private investments would ease fiscal pressure – WB MD
19 November 2012 03:14 am
World Bank Managing Director Sri Mulyani Indrawati stressing a point. World Bank Country Director Diarietou Gaye is also in the picture
If Sri Lanka wants to sustain high economic growth in future, the country should try to import more and attract more capital from credible private sector partners, a top World Bank official said.
According to World Bank Managing Director Sri Mulyani Indrawati, the pressures that will be exerted on the fiscal position of the country when pursuing high growth can be controlled if there is a continuous flow of quality private sector investments.
Sri Mulyani who was on a brief visit to Sri Lanka told journalists on Saturday that the input of the private sector is very important as the government is facing issues in the fiscal side.
It is encouraging to see performance of the Sri Lankan economy. However major challenges are there for the economy to move forward. The fiscal position, debt exposure, size of the budget deficit shall be addressed for sustainable development,” she said.
Sri Mulyani noted that the perception about the economy would be the key to attract investments to the country, and stressed that policy consistency and property rights will function as foremost pull factors for Foreign Direct Investment (FDI).
She also said that, being the latecomer into the development scene, Sri Lanka will not have to do the mistakes done by other countries in the Asian region in luring FDIs in their early development stages and advance forward by learning from their mistakes.
When queried about her views on Sri Lanka’s debt portfolio, where the country has borrowed more from China than from other funding partners put together, Sri Mulyani said that as long as the ‘borrowing process is transparent, the source is no problem’.
“Borrowing is not an issue. We are not addressing the issue where the debt is coming from but where the debt is going,” she said.
The WB Managing Director also noted that Sri Lanka is facing a productivity challenge, specially with regard the quality of the Sri Lankan graduate.